Fewer SAns default on home loans but more depend on credit cards, loans for daily expenses

New data shows that South African households are increasingly prioritising home loan repayments, with mortgage defaults improving sharply to a two-year low.

This has led to a 20% year-on-year improvement in home loan defaults, according to the Experian Consumer Default Index (CDIx) for the fourth quarter of 2025.

While the overall default rate has declined, however, the data points to rising pressure beneath the surface.

Retail loan defaults are worsening and more consumers - particularly in higher-income brackets, are leaning on credit cards and personal loans to manage day-to-day expenses.

This highlights a more complex and strained credit environment despite signs of recovery, says the consumer credit reporting company.

Stephen Grootes interviews Jaco van Jaarsveldt, Head of Commercial Strategy and Innovation at Experian Africa.

They have seen a significant increase in the usage of credit cards,especially across the more afluent segments of the market, van Jaarsveldt says.

"It's a function of increased financial distress that we observe in the two most affluent segments which typically are the luxury living and aspirational achievers segments."

These two segments are the ones most exposed to secure lending as well, the index shows.

Since the COVID pandemic, these are the people that have typically been the target of lenders and bankers from an existing customer perspective, van Jaarsveldt remarks.

"They have multiple credit cards and these aren't your typical R20,000 to R40,000 limits - they have multiple cards with R100,000-plus limits."

"Post-COVID we've seen a significant drawdown in home loan facilities and then also an increase in secured exposure limits, which resulted in the banks effectively reducing supply and as a result we've seen a significant improvment in the home loan Consumer Default Index specifically."

Scroll up to the audio player to hear more insights from Experian's Jaco van Jaarsveldt